Vélin virkar vel.

Because Icelandic usually puts the definite article on the end of the noun.

• vél = machine
• vélin = the machine

Here, -in is the definite ending for this form of the noun. So vélin is not just machine, but the machine.

Vél is a feminine noun.

That matters because Icelandic nouns change form depending on:

• gender
• number
• case
• whether they are definite or indefinite

In this sentence, vélin is the feminine singular definite form.

It is in the nominative case.

That is the normal case for the subject of a sentence. Since the machine is the thing doing the action of working/functioning, it appears in the nominative:

• Vélin = the subject
• virkar = works/functions
• vel = well

Because virkar is the present tense, 3rd person singular form of the verb virka.

The dictionary form is:

• að virka = to work / to function

In the sentence, the subject is singular (vélin = the machine), so the verb is:

• ég virka = I work/function
• þú virkar = you work/function
• hann/hún/það virkar = he/she/it works/functions

So Vélin virkar means The machine works / is functioning.

In this sentence, virka means to work, to function, or to operate properly.

So Vélin virkar vel means that the machine is functioning well.

A useful point: virka can have slightly different shades of meaning in other contexts, such as to have an effect or sometimes to seem/come across in a certain way, but here the basic meaning is simply work/function.

Because vel is an adverb, and it describes how the machine works.

In English, compare:

• The machine is good. → adjective
• The machine works well. → adverb

Icelandic does the same kind of thing here:

• vel = well

So virkar vel means works well, not is good.

Yes, in meaning, but not in the simple regular way English learners might expect.

• góður = good
• vel = well

So vel is the adverb you use where English uses well. You should learn it as its own common word rather than expecting a predictable ending change from góður.

This is the most neutral, basic word order:

• Vélin = subject
• virkar = verb
• vel = adverb

So it is basically Subject + Verb + Adverb, like English:

• The machine works well.

Icelandic word order can change more than English in some contexts, but this sentence is straightforward and natural.

A few useful pronunciation points:

• Vélin: the é is pronounced like ye in many descriptions, so the word begins roughly VYE-
• Stress in Icelandic usually falls on the first syllable
• virkar has a rolled or tapped r
• vel is pronounced with a short e, roughly like veh-l

A rough English-friendly approximation is:

• VYE-lin VIR-kar vel

That said, Icelandic pronunciation has sounds and rhythm that do not match English exactly, so approximations only go so far.

Yes, you might hear that, but it is a slightly different style.

• Vélin virkar vel = The machine works well / is working well
• Vélin er að virka vel = The machine is working well

The version without er að is very common and often more neutral. Icelandic does not use the progressive be + -ing as automatically as English does, so the simple present often covers what English would express with either works or is working.

Grammatically, vél is the indefinite form machine, but Vél virkar vel by itself is usually not the most natural equivalent of A machine works well in ordinary usage.

Without the article, the sentence can sound more general or less idiomatic depending on context. Very often, Icelandic would use:

• Vélin virkar vel = The machine works well
• Þessi vél virkar vel = This machine works well
• Ein vél virkar vel = One/A certain machine works well (in a more specific context)

So yes, dropping -in changes the meaning from the machine to machine / a machine, but whether it sounds natural depends on the situation.